Analysis: Under fire, Venezuela's Maduro vows new graft crackdown

CARACAS (Reuters) - When even Venezuela's most famous topless model complains on Twitter that the government is too soft on corruption, it could be time for President Nicolas Maduro to sit up and take action.

Already facing big economic challenges while trying to fill the shoes of his charismatic mentor, the late Hugo Chavez, Maduro is on the receiving end of a new wave of criticism that he lets graft close to home go unpunished.

The former bus driver, who narrowly won an election in April after Chavez's death from cancer, has launched a fresh anti-corruption drive. But it has suffered from a public perception that "big fish" allied to his administration are being spared.

"I was ignored when I tried to denounce corruption," glamour model and singer Diosa Canales, not normally known for her political interventions, tweeted to her more than 1 million followers. "Mr. President, where there is no justice, there is no peace. Don't let corruption surround you."

Her comments this week capture a sentiment in the streets. Venezuelans are increasingly focusing on graft as an outlet for their frustrations over issues ranging from food shortages and high inflation to shocking levels of violent crime.

With the growing anger denting his popularity, Maduro has said he will seek decree powers that were last used by Chavez in order to revamp his fight against corruption, and says he is ready to "change all the laws" if necessary.

His ministers were to hold a special meeting on Wednesday to discuss possible tactics. Vice President Jorge Arreaza, Chavez's son-in-law, said the government would "analyze all the judicial and political options."

"We won't let the corrupt ones steal the hopes and dreams of the people of Bolivar and Chavez," he said, referring to Venezuela's independence hero Simon Bolivar. "We will win!"

They will have their work cut out. Venezuela has a long history of corruption and the wide range of state subsidies and complex, multi-layered currency controls allow some to rack up quick and heavy profits.

PROSTITUTION NETWORK

It is not clear which laws Maduro might change with decree powers. So far, he has trumpeted dozens of graft arrests at state-run enterprises, while his supporters have leveled charge after charge against opposition figures.

The opposition says those allegations are false and anyway concern relatively small amounts of money - especially when compared with the tens of billions of dollars they say their rivals in government have looted from public funds.

In the past, some rivals of Chavez were jailed or forced into exile on what they say were trumped-up corruption charges.

Nowadays, the government and the opposition routinely accuse each other of allowing rampant graft.

In a particularly tempestuous session of the National Assembly on Tuesday, ruling party lawmakers fired allegations at opposition members that included running money laundering scams, drugs trafficking and prostitution networks.

In turn, grim-faced opposition legislators held up placards bearing the names of Chavez-era corruption scandals.

"I feel deeply ashamed at today's session," said one prominent opposition leader, Julio Borges. "But today's debate gives us more strength to fight for a different country."

Maduro's anti-corruption drive has so far snared several senior officials at state-run institutions, including the tax boss at La Guaira port and several people charged with embezzling $84 million from a China-financed development fund that was already notable for its lack of transparency.

Fifty people have been arrested in the last two weeks alone.

But that has done little to satisfy many Venezuelans who openly wonder why there has apparently been no investigation of powerful and wealthy individuals widely rumored to be corrupt.

Taking on those figures could put extra strain on the unwieldy coalition that Maduro inherited from Chavez. It ranges from military officers to businessmen, leftist ideologues and armed militants known as "colectivos," and it was largely Chavez's charisma that kept the coalition intact.

But inaction runs the risk of alienating some passionate "Chavista" supporters who see unchecked corruption as a betrayal of the late leader's legacy.

SUPERPOWERS AND SMOKESCREENS

Maduro's supporters in the Assembly say they want him to root out graft wherever it is, and would back him changing the law if that is required.

"Our role here is very clear," said Diosdado Cabello, the influential president of the chamber, adding that the lurid charges made against the opposition could not be ignored.

In response, opposition leaders said it was an honor to be attacked by a corrupt gang "led by the most corrupt leader in the history of Venezuela." Cabello denies their allegations.

Chavez was granted decree powers in 2010 to push through relief and reconstruction projects after floods left nearly 140,000 people homeless.

But he realized there was a public relations problem with ruling by decree, and at one point offered to give up the powers if the post-flood measures were put in place quickly.

"There is a campaign to make me out to be a devil," Chavez said at the time. "If anyone feels restricted (by the decree law), then I'll send it back. I have no problem."

Opposition leader Henrique Capriles, who narrowly lost the presidential election in April to Maduro, was scathing about his rival's plan to seek decree powers now.

As in the case of Maduro's claim earlier this year to be the target of an assassination plot by Washington, and his asylum offer to former U.S. intelligence contractor Edward Snowden, Capriles said it was just another ruse to distract voters.

"They're asking for superpowers and they create these smokescreens to divide the spoils between themselves," he said.

"These gentlemen have had 15 years sucking at the state's teat ... If we want to end corruption in Venezuela, we have to get rid of this government."